May 6, 2020 / 2:32 PM / 21 days ago

UPDATE 3-Bunge reports loss, cuts 2020 outlook as coronavirus hits demand

(Adds CEO and analyst quotes, adds share drop)

By Karl Plume

CHICAGO, May 6 (Reuters) - Agricultural commodities trader Bunge Ltd reported a first-quarter loss on Wednesday and lowered its full-year forecast as the coronavirus crisis hammered demand for fuel and upended global food supply chains, sending shares plunging 11%.

Demand for edible oils fell toward the end of the January-to-March period as the crisis shuttered restaurants and suspended travel, while crashing Brazilian ethanol prices and whipsawing currency markets dented Bunge’s outlook for its sugar and bioenergy unit.

The results do not yet reflect the more recent oil price crash and its related impact on biofuels pricing.

“We’re operating at a time of unprecedented volatility, complexity and uncertainty,” Chief Executive Greg Heckman said. “We expect to see a greater impact from COVID-19 in our business in the second quarter, primarily in our edible oils business.”

The earnings hit offered the latest glimpse into how the pandemic is affecting global supply chains, from shuttered meat packers and biofuel plants to heightened demand for at-home meal ingredients.

Bunge forecast a particularly challenging year for its edible oils unit as the pandemic diminishes demand from restaurant and food service customers. Retail demand for oils from at-home chefs would only partly offset the hit, the company said.

Slumping fuel consumption, including for soybean oil-based biodiesel and corn- and sugar-based ethanol, created further headwinds for Bunge as pandemic lockdowns continue to limit travel.

“What’s weighing on the stock is you’ve got challenges associated with edible oils and the sugar and bioenergy business that didn’t exist two months ago,” said Ben Bienvenu, analyst with Stephens Inc. “That’s going to weigh on their earnings power this year despite what is really solid execution in the core agribusiness segment.”

Rival agribusiness Archer Daniels Midland Co last week highlighted supply-chain disruptions after reporting stronger-than-expected quarterly results. Privately held Cargill Inc canceled its most recent earnings release due to the COVID-19 pandemic.

The pandemic is the latest hurdle for two-century-old Bunge following a U.S.-China trade war that reordered global grain flows and a years-long grain glut that depressed crop prices and thinned trading margins.

Bunge has been cutting costs and shedding non-core assets to weather a prolonged market downturn that made it a takeover target in 2017 and 2018.

The company last month said it would sell 35 of its U.S. grain elevators to rival Zen-Noh Grain.

Bunge’s adjusted first-quarter net loss came to $181 million, or $1.34 a share, compared with year-earlier profit of $59 million, or 36 cents a share.

The company’s stock was down $4.37, or 11%, at $33.57 in morning trading on the New York Stock Exchange. (Additional reporting by Shradha Singh in Bengaluru; Editing by Ramakrishnan M and Bernadette Baum)

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